Chief executive Gary Elden, commented, "Against a backdrop of improving macroeconomic conditions in a number of our markets, we have made a satisfactory start to the year, in what is, for seasonal reasons, always our least significant quarter.

"Our contract division made further progress as it continued to benefit from a greater strategic focus and increasing exposure to new high growth markets, particularly Energy and Life Sciences. Contract gross profit increased by 18%* year on year and now accounts for 61% of the Group total. Permanent, whilst still negative, saw some improving trends and the pre-deal pipeline is beginning to suggest a pick-up in activity. We are continuing to invest in the future growth of both businesses to ensure they are appropriately resourced for the market opportunity.

"While, as always, we remain cautious about extrapolating the trend for the year from the quieter first quarter, the strength of our contract book and improving outlook for permanent give us confidence for the year ahead."

Key Metrics & Commentary

Financial highlights - Group Gross Profit

Q1

Q4 2013 1 & 5

Q3 2013 1

Q1 2014

Q1 2013 1

YoY % Var 2

YoY % Var 2

YoY % Var 2

Contract

&pound29.0m

&pound24.5m

18%

4%

7%

Permanent

&pound18.8m

&pound19.8m

-4%

-15%

-11%

Group

&pound47.8m

&pound44.3m

9%

-5%

-2%

UK&I

&pound14.2m

&pound14.0m

1%

-10%

-9%

Continental Europe

&pound23.3m

&pound22.2m

4%

-7%

-8%

Rest of World

&pound10.3m

&pound8.1m

35%

11%

15%

&pound47.8m

&pound44.3m

9%

-5%

-2%

ICT

&pound19.1m

&pound20.0m

-5%

-13%

-5%

Non ICT

&pound28.7m

&pound24.3m

20%

1%

1%

&pound47.8m

&pound44.3m

9%

-5%

-2%

Contract / Permanent Split

Contract

61%

55%

Permanent

39%

45%

100%

100%

Geographical Split

UK&I

30%

32%

Continental Europe

49%

50%

Rest of World

21%

18%

100%

100%

ICT / Non ICT Split

ICT

40%

45%

Non ICT

60%

55%

100%

100%

Operating Metrics

Q1

Q4 2013 1 & 5

Q3 2013 1

Q1 2014

Q1 2013 1

YoY % Var

YoY % Var

YoY % Var

Contract Runners 3

UK&I

2,576

2,378

8%

4%

1%

Continental Europe

2,412

2,193

10%

11%

3%

Rest of World

865

465

86%

76%

84%

Group

5,853

5,036

16%

13%

8%

Permanent Placements 4

UK&I

346

405

-15%

-20%

-21%

Continental Europe

665

761

-13%

-18%

-15%

Rest of World

423

327

29%

9%

13%

Group

1,434

1,493

-4%

-13%

-10%

1 Excluding IT Job Board

2 At constant currency

3 Period end number of contractors onsite with clients and being billed

Group gross profit increased by 9%* year on year in Q1 versus a decline of 5%* in Q4 2013.

Contract performed encouragingly in the period, with a strong seasonal recovery in contract runners. Average contractor gross profit per day rates remained robust during the quarter.

Permanent gross profit reduced by 4%* year on year, an improved performance on Q4 2013, which was down 15%*. UK&I was down 12%* (Q4 2013 down 25%), Continental Europe was down 9%* (Q4 2013 down 16%*) and Rest of World grew by 15%* (Q4 2013 down 1%*), driven by strong performances in Americas and Asia. Average permanent placement fees remained robust during the quarter.

Group sales headcount at 2 March 2014 was up 6% versus the year end and up 18% year on year. Year on year, UK&I sales headcount was up 15%, Continental Europe sales headcount was up 14% and Rest of World sales headcount was up 28%. Consultant headcount continued to remix slightly towards Contract during Q1, with contract consultant numbers up 6% and permanent consultant headcount up 5% since the year end. Average consultant headcount for the quarter was up 15% year on year, with contract consultant average headcount up 26% and permanent consultant average headcount up 5%.

The Group has a network of 54 offices in 21 countries, of which 39 are outside the UK. The Group now generates 70% of gross profit from markets outside UK&I (2013: 68%).

SThree remains in a strong financial position. Net debt at 2 March 2014, after payment of an interim dividend of &pound5.7m, was circa &pound8m. The Group has a &pound20m revolving credit facility ("RCF") with RBS committed to 2017.